The U.S. economy expanded at an annual rate of 2.8% in the third quarter of 2024, according to the "second" estimate released by the Bureau of Economic Analysis. This matches the growth reported in the initial "advance" estimate and represents a slight slowdown from the 3.0% growth in the second quarter. Current-dollar GDP increased by $338 billion to reach $29.35 trillion, with an upward revision of $4.4 billion from earlier calculations.
The second estimate reflects more complete source data, which revealed upward adjustments in private inventory and nonresidential fixed investments, as well as downward revisions to export growth and consumer spending. Imports, a subtraction in GDP calculations, were revised lower, slightly offsetting the weaker export figures.
The GDP increase in the third quarter was driven by gains in consumer spending, exports, federal government spending, and nonresidential fixed investment. However, decelerations in private inventory investment and residential fixed investment contributed to the slowdown compared to the previous quarter.
The price index for gross domestic purchases rose 1.9%, up by 0.1 percentage points from earlier estimates. The PCE price index, a key inflation measure, increased 1.5%, with core inflation (excluding food and energy) revised downward to 2.1%.
Personal income rises $176 billion, savings rate drops to 4.3%
Current-dollar personal income grew by $176 billion in the third quarter, though this represented a downward revision of $45 billion from the advance estimate. Disposable personal income rose 2.3%, or $123 billion, while real disposable income edged up 0.8%, a reduction of 0.8 percentage points from earlier estimates. The personal savings rate declined to 4.3%, revised down by 0.5 percentage points.
Corporate profits drop by $10.2 billion
Corporate profits fell by $10.2 billion in the third quarter after a substantial $132.5 billion increase in the second quarter. Domestic financial corporations experienced a $2.6 billion decline in profits, reversing a $42.5 billion gain in the previous quarter. Nonfinancial corporations recorded a $30.8 billion profit increase, which was significantly smaller than the $108.8 billion gain in the second quarter. Rest-of-the-world profits decreased by $38.3 billion, reflecting a $52.5 billion drop in receipts and a $14.2 billion reduction in payments.
The second estimate incorporated upward revisions in state and local government spending, residential fixed investments, and private inventory investments. These were counterbalanced by weaker data on exports, federal government spending, and consumer spending.
